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Investors beware:Govt unveils not-wanted industry list

2011-04-26 08:41:26Source:Global TimesAuthor:

The nation's economic planning agency on Monday published a new list of industries that it would encourage, restrict or ban, a blueprint that could have far-reaching impact on investment activities in China over the coming years.

The list will be a reference for the government to decide which foreign investors are welcomed. In a statement summarizing the new guidelines, the National Development and Reform Commission said the list makes changes to reflect technological changes and industrial development.

"(Due to overcapacity,) some steel, non-ferrous and construction material products will no longer be encouraged," the commission said. For projects in sectors listed as "encouraged," investors often find it easy to obtain approval from the government, in addition to cheap bank loans and land as well as preferential tax treatment.

But for industries labeled as "restricted" or "to-be-eliminated," investors will find it hard to get governmental approval for new projects and to maintain operations. For example, such projects would be the first to be cut off when electricity is rationed. The updated list has added new energy, inner-city railway transport equipment and public security devices into the "encouraged" category.

Automatic control systems for vehicles, high-speed precision bearings as well as key parts for new-energy vehicles will also be encouraged, according to the statement on the planning agency's website.